With the tax deadline behind you, you have likely put taxes out of your mind. But it’s the perfect time to be proactive and start planning for the next tax season! If you want to maximize your tax refund next year, here are some things you can do now:
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Adjust your W-4 withholding allowancesKeep track of tax deductionsSave for the futureLearn something newClean out your closets and donate to charityAdjust your W-4 withholding allowances
If you owed money at tax time, it is time to review your tax withholding from your paycheck and adjust your withholding allowances on your W-4. Adjusting the amounts on your W-4 form based upon your personal situation and latest paycheckwill potentially increase your income tax withholding. While your paycheck may be lower based upon the update, the payoff will come next spring when you don’t owe money when filing your taxes.
And as an added perk, you could potentially receive a tax refund instead. TurboTax W-4 withholding calculator can help you easily figure out how much you should have withheld on each paycheck to boost your tax refund. On the flip side, if you had a large refund but could use that money throughout the year instead, updating your W-4 form can help you increase your take home pay by reducing the amount that is being withheld with each paycheck. Simply follow the steps in the calculator, print out an updated copy of your W-4 form and submit it to your employer to have the changes take effect with your next paycheck.
Keep track of tax deductions
Organizing documents throughout the year helps ensure you don’t miss any deductions when it comes to tax season. Prepare a file and label it “Current Tax Info”, and tuck it into your desk drawer. Now, every time you see something during the year that’s tax deductible, drop it into the file. Knowing what tax deductions are allowed under the current tax law can help you plan and save at tax-time. TurboTax will help you claim the ones you’re eligible for with the questions asked when you prepare your tax return at tax-time. If you’re self-employed, you can track your income, expenses, mileage, and capture your receipts year-round with QuickBooks Self-Employed. That information can then easily export to your TurboTax Premium tax return.
Save for the future
It’s never too early or late to start investing in your retirement. If you haven’t started saving for the future, now is a good time. Here are a few tips to help towards the retirement goal:
a) You can contribute up to $23,000 in 2024 to your 401(k) retirement account. However, if you are age 50 or over you can make catch up contributions up to $7,500, which increases the total contribution to $30,500.
b) If you are self-employed, you can contribute to a Simplified Employee Pension (SEP) IRA up to: 25% of your net earnings up to a total of $69,000 for 2024 and your contributions can be deductible as a business expense. You can also contribute up to $76,000 ($78,000 if you are 50 and older) to your IRA and receive a tax deduction for your contribution.
c) Another reason to save is that you may automatically be eligible for the Savers Credit worth up to $1,000 ($2,000 married filing jointly). The Savers Credit is a little-known tax credit that lower to middle-income taxpayers can get just for contributing to their retirement and because it’s a tax credit, it will reduce the taxes you owe dollar-for-dollar.
Learn something new
Maybe you want to learn a new career, update your skills in your existing career, or study a subject you are interested to add to your overall knowledge No matter your motivation, if your income is moderate, you may be eligible for the Lifetime Learning Credit. You can claim a tax credit of 20% of your tuition expenses, up to $2,000 per tax return. You don’t need to be on track for a degree. The cost of any class taken at an eligibile educational institution taken at the college level is eligible for the tax credit.
Clean out your closets and donate to charity
In addition to creating new space in your life, you can take a quick tax deduction for the fair value (or thrift shop value) of household goods, gently used clothing and shoes, toys that your kids no longer play with, and even furniture you no longer need. If you have books and magazines you give to the library, you can deduct that as a charitable contribution as well. As long as you are able to itemize your deductions, you can use these donations to help reduce your taxable income. Make sure you obtain a receipt for any donations made.
Following these easy tips will help you get more money and boost your next tax refund!
Don’t worry about knowing these tax rules. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.
My father died this year and I inherited his home that I sold and life insurance policies. These were set up in a trust. Will I owe taxes on these?
Hello I was wanting to know if I file self employed? Can I use my car payments as a deduction on my taxes this year? I got a new car in March.?
A friend of mine was asking about tax refunds for next year. These questions got me interested in learning more about tax planning. It might help him to know that he should look into donating to charities to further his luck with tax refunds.
Do first time homeowner get a tax incease on their taxes
HiSandra,
If you just purchased a home it may decrease your taxes since you get a deduction for the home mortgage interest you pay, property taxes, and any points you paid to secure your loan. You will will receive a Form 1098 that reflects deductible home mortgage interest and sometimes property taxes if impounded in your home loan. You should also check your HUD-1 settlement statement for property taxes and points paid.
Thank you,
Lisa Greene-Lewis
I’ve been trying to let friends and family know it’s a good idea to put a little bit extra back on withholding on both fed and state . 99% of ev1 I’ve told never thought of doing it that way. And OMG . It’s a hiding savings account u don’t see till u do ur taxes . Trust me I got tired every year I had to pay back in taxes . I got tired of that real fast . I only put in $25.00 each week in extra holding for fed & state. And it’s a nice payback in the long run . $1300.00 each from fed and state . Yeap I do it every year. And the big kicker I love the most . When the tax preparer look at ur refund and said WOW. I tell them what I do . It’s my money
$25 aweek x 52 weeks =1300 ……
My wife passed away in March.What are the tax implications for 2017 tax filing.
Hi James,
Sorry about your loss. For 2017 as a widower, you may file Married Filing Jointly for your spouse’s year of death. Keeping your joint filing status will allow you to get the same tax breaks as when your spouse was alive, like personal exemptions, lower tax rates, and other valuable tax breaks for married couples. For the next two years following your spouse’s death, you may be able to file as a Qualifying Widower if you have a dependent child, which allows you the same lower tax rate as Married Filing Jointly returns. You will claim income your wife received in 2017 and you will also be able to claim any deductions and credits she was eligible for. If she is entitled to a refund you can claim her refund by filling out and mailing in IRS Form 1310, Statement of a Person Claiming a Refund Due a Deceased Taxpayer when you do her taxes. Here is an artice with more info http://blog.turbotax.intuit.com/tax-planning-2/real-talk-series-i-am-recently-widowed-how-will-this-affect-my-taxes-25359/
Thank you,
Lisa Greene-Lewis
I have a 10% medical disability from military service. What if any Federal tax benefit could I qualify for?
Hi Erwin,
You may see benefits related to your income like your disability income received from the VA may not need to be included in your income as well as grants for homes or vehicles given due to disability should not be included in income. You also include income from combat pay, which is non-taxable when you are trying to qualify to take the Earned Income Tax Credit. You don’t need to know all of these rules, TurboTax will ask you simple questions and give you the tax deductions and credits you are eligible for. Here is another article that may be helpful http://blog.turbotax.intuit.com/tax-tips/tax-benefits-for-military-families-21322/
Thank you,
Lisa Greene-Lewis
I rolled over a 403b this year. It was a two tiered annuity and the surrender value was 8K+ less than the account value. Is there anyway for me to write off this “theft” of my 8K that the insurance company kept?
Has congress passed the charity deduction
from IRA’s being non taxable for 2014?
Any tips for a retired tax payer? My wife and I claim 0 exemptions but still paid 13,000 in taxes owed at tax time.
My husband and I are retired also and always end up having to pay federal taxes. We have decided to make quarterly payments to IRS so it isn’t such a big dip at tax time. We also have 0 deductions and federal taxes taken out of our retirement checks.